this is all such a load of horse manure... one day... EXACTLY one day after bush lifted oil drilling embargoes on u.s. locals the price starts dipping...this proves that all along bush and the slime were colluding with the mu$$lims to jack-up and otherwise artificially manipulate the price of crude in order to get their way... more drilling rights without limitations by causing a worldwide panic... and you don't think these efing bastards did the same thing to go into afg. and iraq...? only the blind cannot see this... no even they can see it... only those who refuse to open their eyes cannot see it... see the truth in what i have been saying... nik. right on the money as usual... out... I CALLED THIS ONE PEOPLE... i called it... they are just so utterly arrogant and so slovenly greedy that they can't even wait a day to sell off their shares with this advanced insider information... and make a killing at everyone else's expense... they truly think they can do and get away with anything and everything and blatantly so with impunity.... WAKE UP PEOPLE AND SMELL THE CREMATORIA STOKING BACK UP!!! nik.
Oil prices plummet more than $6 amid economic fear
By ADAM SCHRECK, AP Business Writer
1 hour, 8 minutes ago
NEW YORK - Oil prices fell harder than they have in 17 years Tuesday, as fears that record fuel prices are spreading broad economic pain exacerbated the third big sell-off in just over a week.
Light, sweet crude plunged $6.44, or 4.4 percent, to settle at $138.74 a barrel in an extremely volatile session. Prices at one point plummeted more than $10 from the day's high.
Mounting concerns about the risks inflation poses to the United States, the world's biggest oil consumer, helped spark the declines. Analysts also attributed the sell-off to Thursday's expiration of options contracts, which tend to increase volatility, and to computers programed to automatically sell once prices reach certain thresholds.
"There was this big ... selling pressure when prices dipped below $140 a barrel. It got a lot of bulls very nervous," said Tom Kloza, chief oil analyst at the Oil Price Information Service. "If it was a fire, you'd call it an accelerant."
The drop, which eclipsed last Tuesday's slide of $5.33, marked the biggest decline in dollar terms since the Gulf War. Even so, prices remain no lower than they were a week ago.
Longtime market observers cautioned that the turnaround may not signal a lasting shift in sentiment — prices have swung violently in recent days as they flirted with record highs. But it does underscore investor uncertainty about the sustainability of sky-high prices and their potentially long-lasting effects on the broader economy.
Over the course of the day, the contract rose as high as $146.73 and fell as low as $135.92. Prices hit a record $147.27 Friday.
Concerns about the economy were high on traders' minds Tuesday.
Federal Reserve Chairman Ben Bernanke told Congress that "numerous difficulties" are racking the U.S. economy, and warned that rising prices for energy and food are elevating the risks of inflation.
At the same time, the Labor Department reported that wholesale inflation jumped by 1.8 percent last month, a larger-than-expected gain. Over the past year, wholesale prices have risen 9.2 percent, the most since 1981.
"Traders get spooked and simply sell positions," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. "The threat of recession, at some point the market's going to plug that in."
Lingering concerns about the health of the financial sector continued to weigh on banking stocks, reminding energy traders that oil prices are not immune to troubles elsewhere in the market.
"Since investment banks have been increasing their ... exposure to commodities, their current distress can have (a) significant impact on oil prices if they are forced to liquidate commodity positions in a run for cash," Olivier Jakob, an analyst at Petromatrix in Switzerland, said in a research note.
The latest monthly market report from the Organization of Petroleum Exporting Countries gave traders further reason to unload oil.
The cartel predicted world oil demand will rise by 900,000 barrels a day in 2009, or 100,000 barrels per day less than this year. OPEC blamed the slowdown on a slumping economy and high pump prices in richer industrialized countries.
Meanwhile, a five-day strike by Brazilian oil workers that began early Monday had less effect on output than feared.
The dollar fell to a new low against the euro, but that did little to halt oil's decline. The weaker dollar has driven prices sharply higher in recent months, enticing investors to pump money into oil as a hedge against inflation and making crude cheaper for overseas buyers.
In Washington, President Bush continued to press the Democratic-run Congress to open up new areas to offshore oil drilling. The president lifted a ban on Continental Shelf drilling Monday, but a Congressional prohibition remains.
"I readily concede it won't produce a barrel of oil tomorrow, but it will reverse the psychology," Bush said at his first White House news conference since April.
At the fuel pump, retail gas prices in the U.S. remained at a record near $4.11 a gallon, according to auto club AAA, the Oil Price Information Service and Wright Express. Diesel rose six-tenths of a penny to its own high of $4.83 a gallon.
Tuesday's sell-off alone is unlikely to bring drivers much relief.
"People shouldn't expect to see their pump prices drop," Kloza said. "By the end of the week, we may be talking about $4 (a gallon), we may be talking about $4.20. That's the nature of the beast."
General Motors Corp., the leading U.S. automaker, said it is assuming oil prices will hover between $130 to $150 a barrel next year. The company made the prediction as it laid out plans to slash jobs and truck production, suspend its dividend and borrow up to $3 billion as it grapples with an ailing U.S. economy and record high fuel prices.
In other Nymex trading, heating oil futures fell 14.59 cents to settle at $3.919 a gallon, while gasoline futures tumbled 17.29 cents to settle at $3.3848 a gallon. Natural gas dropped 48.2 cents to settle at $11.477 per 1,000 cubic feet.
In London, August Brent crude fell $5.17 to settle at $138.75 a barrel on the ICE Futures exchange.
